UK Employment Data Turning Positive will Spark Rise in British Appetite for Overseas Property

Today the Office for National Statistics revealed the latest data on the UK labour market, and while it is a lot more positive than previous reports, overall it is still negative, as we can see from Sterling losing some ground to the Euro and the Dollar.

Positivity comes in the fact that 86,000 more people were in part-time employment in Q3 than in Q2. Unfortunately that is tempered by an 80,000 fall in the number of people in full time employment. The combination of the two gives a positive 6000 more people in employment in the July-September quarter than in the previous quarter. However, the number of unemployed people climbed 30,000 to 2.46 million.

While I said that the report was negative overall, which as you can see it is in terms of raw data, however, in terms of interpretation this can only be called a positive report. This is because the rise in unemployed people is a lot smaller than previous quarters, and it contains the words "increase" and "in the number of people in employment", in the same sentence. All previous reports this year have been a solid wall of negative data.

The fact that the number of people in part-time employment rose could be said to show that employers are beginning to test the waters of expansion by hiring part-time staff, although the report says it is simply people taking part-time jobs because they can't find full time ones.

Either way, like I said, this is the first labour market review to contain any positive data, and it confirms that the UK economy is passed its lowest point and on the road to recovery. How this relates to overseas property investment is simple.

Since the first UK economic indicators turned positive in April, demand for overseas property has been increasing as British buyers returned to their favourite foreign hotspots. This has primarily been well-off Brits, who weren't left in financial difficulty by the recession, but who were fearful of just how bad it could get; that they might become affected eventually. Now that the full effect can be measured more easily their confidence has returned.

However, many more potential buyers have been waiting for unemployment to run out of rocket fuel before they felt confident in the recovery. Now that the ONS has revealed clear data that suggests that point is upon us. It will likely mark further increases in demand for overseas property among British buyers.

This will be hindered by the fact that finance is still very restricted for property purchases abroad, just as it is in the UK. This is because, unlike the first group of returning buyers, those returning because fear for their job is subsiding are more likely to be looking for finance to make their purchase.

That said, while finance is hard to come by, it is not impossible, so there will be a rise in demand for overseas property from British buyers. This demand will continue to rise as unemployment falls, as mortgages get easier to obtain and as Sterling regains its former glory.